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Health & Fitness

International Investing - Ireland

The world is a big place – there are over 190 countries and 7 billion people in the world, which really boggles the mind if you sit down and think about it. In addition to being an interesting intellectual exercise, this fact can also have broad implications for your investments and your financial future. It is easy to stay focused on U.S. firms, news, and events during the day-to-day grind, but it is always important to be aware of your surroundings – especially when it comes to your investments. With that in mind, this series of articles will focus on countries and investment opportunities outside the United States that you might not usually hear about.

As always, be sure to consult a financial services professional familiar with both the potential investment and your unique financial situation before embarking on any investment program.

Note: this piece was first posted in October 2013 and has been updated.

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Ireland

Update: Since the initial writing of this post, there have been several news stories about the Irish economy that are market-moving. The recovery of the Irish financial sector, especially the Bank of Ireland, has led private equity giant Wilbur Ross to begin selling off some of his position. Additionally, Ryanair, an Irish air carrier, is poised to potentially double traffic due to several newly-inked deals. Lastly, Chiquita purchased the Irish fruit distributor Fyffes – the deal creates the largest banana distributor in the world.

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When Ireland comes to mind, some of the more common things that are thought of are Guinness, St. James Brewery, and St. Patrick’s Day. The Irish have a rich and vibrant history that still has a powerful influence on the country, government, and economy today. If, however, the analysis of the Irish ended with that cursory overview, a large number of possible reasons to invest in Ireland would be overlooked. Once dubbed the “Celtic Tiger,” the Irish economy was hit especially hard during the financial crisis of 2008-2009. By taking stringent economic measures and restructuring its largest financial institutions, the Irish economy has begun to rebound and to attract significant FDI once again.

Ireland has many facets that make it an attractive potential international investment. The nation has invested massive amounts of both financial and intellectual capital to turn itself into a tech-friendly hub, and the results speak for themselves. Boston Scientific, Microsoft, IBM, Google, Facebook, and EA are just a handful of the tech giants that have significant operations located in Ireland. As a member of the eurozone, goods, services, and personnel can flow freely between Ireland the world’s most valuable market, the Eurozone. Ireland has been named the most Globalized Western economy, as well as being ranked 13th in the world in the Global Innovation Index. Last but not least, the extremely low tax rates offered by Ireland make it extremely appealing for international corporations who wish to minimize their tax liabilities.

When looking at investing in Ireland, there are two primary ways to go about it – ADRs or direct purchases. An ADR is basically a certificate held by a U.S. banking institution that represents a certain number of shares in the foreign company, and is held by the U.S. institution. This helps to cut down on the administrative fees and other costs that would otherwise be incurred. For more direct exposure, you can also purchase shares directly from Irish stock exchanges if your broker offers those services to its retail investor base (you and me).

Some of the more popular and well known Irish ADR’s are Elan (ELN), which is a major pharmaceutical firm that is based in Dublin, with major interests in the United States. The Bank of Ireland (IRE) is the nation’s largest financial institution, and Ryanair (RYAAY) is Ireland’s best-known provider of air transportation. The largest and best-known Irish ETF is iShares MSCI Ireland Capped Index (EIRL), which, like several other country-specific ETFs, has a smaller exposure to the financial sector.

As always, I have attached some links with more information

Happy Reading!

http://www.irishexaminer.com/business/ryanair-aims-to-double-business-traffic-following-partnership-with-travelport-261700.html

http://dealbook.nytimes.com/2014/03/10/chiquita-to-buy-irish-fruit-and-produce-distributor-fyffes-in-all-stock-deal/

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